from the a-step-forward dept

There's been lots of anticipation about Kim Dotcom's new "Mega" service. We've mostly held off commenting despite all the speculation and rumors, because, well, they were all speculation and rumors, and Dotcom has a history of hyping things way up. However, Gizmodo apparently got a sneak peak at the service, which is set to launch tomorrow, and has revealed the basic details, claiming that "this service could dismantle copyright forever." That statement is ridiculous and pure bluster, not at all supported by the service.

From the description, the service does look nice and potentially useful. It's really just a cloud storage system, not an online Dropbox or Box.net or Google Drive. It has a nicely designed file manager feature. The real "difference" is just that Mega has client-side encryption built in. So, basically, you encrypt anything you put into the Mega storage system before you upload it, and thus even Mega doesn't know what's there (mostly) and can't decrypt it. You could hack together something like this with other services, if you just encrypted stuff yourself before uploading it to other cloud drives. By building it in, however, Mega is clearly adding a significant level of convenience.

All in all, it does look like a pretty nice service, and one that may be worth checking out if you use cloud storage regularly. That said, the claims of destroying copyright seem overblown. If the claim that a file can be shared "with a single right-click" is accurate, then once that link is used, it would be simple for anyone with access to Mega's log files -- including Mega and, potentially, government agents -- to decrypt the file and see what's in it. If that claim is an exaggeration, and a key needs to also be shared separately, then it's no different than how encrypted data is shared already. And copyright still exists.

There may be some more details to come out once the product is officially launched tomorrow, but if the service is to be used for sharing, as implied, then there has to be a decryption process somewhere. The Gizmodo piece is as bit unclear, but it sounds like this likely involves two Mega users having their local clients talk to each other somehow to share the decrypt code. But, obviously, a government or Mega itself could potentially also be that local client on the other end. Basically, once you're sharing, the "encryption" issue is still handy, but not a huge deal. And the user may be very liable for infringement.

In the end, it sounds like there are some nice features, and some additional protections from liability for Mega specifically, but I don't see how this "dismantles copyright" even temporarily, let alone forever. Also, given the way the government likes to interpret things, you can bet that if it wanted to, it will make the case that this use of encryption is a form of "inducement" for infringement as well.

All in all, it looks like an interesting product, though hardly revolutionary.

from the you-wouldn't-want-to-do-that,-now... dept

There have been a bunch of stories over the past month or so about how Kim Dotcom is supposedly getting ready to launch a new service called Megabox. We've purposely avoided such stories, mainly because they're pure hype and speculation for vaporware. If he actually launches something then perhaps there's a story there. Also, we're somewhat amazed (or possibly just amused) at Megaupload supporters who seem to already think that Megabox is an amazing idea, since the details reported about it certainly appear to be little different from garden variety malware, injecting ads into other sites. Either way, in a recent profile of Dotcom in Wired, he talks a little more about the new plans, suggesting that it was something to keep them busy while fighting the lawsuit.

A new filing from the DOJ in the US side of the lawsuit (embedded below), is really a response to Megaupload's recent request to have the charges against the company temporarily dismissed until such time as the individual defendants are extradited. As we've explained, this is mostly a procedural fight, over whether or not the company itself can be charged, despite not having a US presence. None of that directly impacts the individuals who have been charged, but certainly could impact the company's ability to launch a new business.

The DOJ filing mostly argues that there is no legal or practical reason to allow the case to be dismissed, even temporarily, as the individuals are still charged, and re-charging the company at a later date will just waste resources. It also argues that Dotcom's US-based lawyers are the real problem here, as they had offered to accept service of the lawsuit in exchange for some sort of deal early on (which the DOJ refused).

What's interesting about the filing is that, without directly addressing the new effort to launch Megabox or whatever Dotcom is calling the new thing, they appear to be warning him that doing so may lead to additional charges against him. The argument as it relates to the procedural question is that, in his push to be allowed to post bail in New Zealand, Dotcom clearly indicated that he would not and could not restart Megaupload or a similar business, because the government had so completely shut him down. As that relates to the procedural question, the DOJ is arguing that there can be no "harm" to the company Megaupload because Dotcom has already said he won't relaunch the company. So if he won't relaunch, what does it matter if the company is charged now or later?

But then the DOJ goes a little further. After it uses all those quotes of him promising not to relaunch anything while out on bail, the DOJ tosses the following into a footnote:

Defense Counsel’s claim that the corporate defendant can and should be allowed to operate undermines the sworn statements of Dotcom that he has no plans or ability to continue to operate or fund the businesses in the Indictment during pendency of the extradition process. If defendant Dotcom intentionally misled the court in New Zealand about his intentions and capabilities in order to obtain his release from pre-extradition confinement, it seems Defense Counsel’s representation might endanger Dotcom’s bail situation or even subject him to additional charges.

In other words, beyond this procedural question, the DOJ is hinting that if Dotcom launches something new, they may say he violated the conditions for getting bail.

The DOJ also uses this as an opportunity to (once again) try to block Megaupload from using its law firm, claiming that because the lawyers are arguing for the case against Megaupload to be dismissed, and this might lead Dotcom to launch something new, that there's a conflict of interest:

The issue raised by the claim of Defense Counsel is particularly awkward since defendant Dotcom is also their client. As the government has pointed out repeatedly, there are a number of conflicts in Defense Counsel’s representations of the various defendants in this matter, of which this is only the most recent example, that have yet to be reviewed by the Court

None of that actually makes much sense. Whether or not they have a legitimate claim for getting the case against Megaupload dismissed, that is a separate issue from whether or not Dotcom launches something new. While I'm guessing the procedural fight is a dead end, the fact that the DOJ is even using that to toss additional threats at Dotcom should he launch his new project shows that they'll leave no stone unturned in trying to hit back at Dotcom.